Mr. Tetsuo Inoue's December 30 article.

“I believe the movement of the Great Rotation had been continuing reliably in the United States through last week.
In this year's final three months, Japan rose ahead of the U.S., and the U.S., which had lagged technically, finally caught up last week. Going forward, it is expected that the movements of Japan and the U.S. will return to a linked state (if one goes up, the other goes up; if one goes down, the other goes down).”

We have accurately predicted the year-start price movements.

The following article is noteworthy.

Trend 951　Series 5　Technical

Up to here I have written about this Great Rotation; to finish on the continuation of its movement in the U.S. last week, on Monday 12/23, with the next day a half-day session and the following day a market holiday, there was an inflow of about $11.2 billion into the SPDR S&P 500 ETF.

Such large inflows before a holiday are not common in the United States. And the size of this single-day inflow was the largest in more than five years for this ETF.
I believe the Great Rotation movement had continued reliably in the United States through last week.

In this year's final three months, Japan rose ahead of the U.S., and the U.S., which lagged technically, caught up only last week. Going forward, the movements of Japan and the U.S. are expected to be linked (if one goes up, the other goes up; if one goes down, the other goes down); however, since this is the year's final “Trend,” I will attach the graphs for Dow's RSI, VIX, and the 'range rate' that I am most concerned about now.

First, the RSI total in Graph 1: the Dow's value rose to 150.82% as of Friday, approaching the 160% level, which lies outside the statutory pace. If Friday's close continues, tomorrow's final trading session of the year would reach 162.51% at that level, and on 1/7 next year it would reach 178.91%, a level shown on this graph that was reached just before last year's late-January drop.

What this implies is that before reaching this level, there will likely be a somewhat larger decline, and the index is likely to form a temporary high before 1/7. Therefore, given the linkage premise, although the Nikkei is down today at the year-end close, I do not want to touch it. I cannot recommend “stock (index) pillow for the New Year” today.

Also, Graph 2’s VIX Inoue Visualization Index seems to have room to rise, but the actual values had remained at an extremely low level below 13 for nine consecutive sessions through last Thursday, indicating no anxiety at all; it rose to 13.43 on Friday and back into the 13s; if measured at a 15-drop, it has been 12 trading days in a row, so eventually this rise cannot be denied from an organic perspective.

And finally, the “range rate,” which I define as the high minus the low during the Dow's intraday trading, divided by the previous day's close, and added to the 5-day and 25-day moving averages (i.e., counting the last 5 days twice), has fallen to 14.81%.

If you look at the graph, this is close to the lowest level seen during the Goldilocks market two years ago, and of course it is the lowest since the sharp drop at the end of January last year. Therefore, we must approach this year-end and New Year with heightened caution. Next year too, those who can get excited when prices fall will win.

This year’s “Trend” is now the final draft.
Thank you very much for sticking with me through such a challenging year. We plan to resume on January 6 next year. May your year ahead be bright.　　Tetsuo Inoue

Written by Hayakawa

Mr. Tetsuo Inoue's December 30 article accurately predicted the early-year price movement